A US federal judge yesterday tossed a crucial lawsuit between VeriSign Inc. and the Internet Corp. for Assigned Names and Numbers, but VeriSign vowed to continue the legal battle in a different jurisdiction.
Judge Howard Matz of the District Court in Central California dismissed with prejudice VeriSign’s claims of antitrust abuse by ICANN, saying the company failed to show a conspiracy to disrupt its business.
The lawsuit, originally filed in February, is meant to settle the long running dispute over how much power ICANN has over VeriSign’s business. While ICANN is ostensibly a technical coordinator, VeriSign describes the outfit as its de facto regulator.
The suit charged that ICANN costs VeriSign money by inappropriately blocking or delaying new domain name registry services. VeriSign claims that by telling VeriSign to drop services such as Site Finder, ICANN acted ultra vires.
After the suit was thrown out in May, the firm re-filed, sketching out a conspiracy of companies that, debatably, compete with VeriSign. The firm claimed these firms had captured the ICANN decision-making process to VeriSign’s detriment.
The US federal court’s decision serves as another important affirmation of ICANN’s multi-stakeholder participatory model, and reaffirms the ICANN structure, said John Jeffrey, ICANN’s general counsel.
Matz ruled yesterday that VeriSign has not sufficiently alleged a conspiracy. He ruled that VeriSign had not shown ICANN’s board had been captured by rivals, or that the board rubber-stamps decisions made by constituent groups that have been captured.
Because the antitrust claim was the only federal claim, the judge tossed six other claims in the lawsuit without ruling on them and without prejudice, meaning they can be resubmitted in other jurisdictions.
What this means is the case will be heard in a California state court, VeriSign VP of government affairs Tom Galvin said. And while the venue will change, our objective to gain clarity regarding ICANN’s appropriate role and the process for the introduction of new services does not.
VeriSign has said from the beginning that the suit is essentially a contract dispute. VeriSign runs the .com and .net registries under contract with ICANN. The contracts specify that ICANN must approve new registry services, but the parties do not agree on the meaning of that term.
When VeriSign submitted a Waiting List Service for approval by ICANN, the process took years, costing the company money. It later bypassed the ICANN process entirely by launching Site Finder almost without warning last October.
ICANN responded by ordering the company to turn the off the $12 million-a-year service, which intercepted misspelled domain names and displayed alternative domains and advertising. VeriSign argued that the decision was made by VeriSign rivals.
One of the conspirators named in the suit, Internet Systems Consortium chairman, Paul Vixie, said yesterday: I’m relieved… I think the whole thing is stupid, and I’m glad to see its tail-lights going round the corner.
While Vixie was not a defendant in the suit, VeriSign had claimed he had conspired with other members of ICANN’s Security and Stability Advisory Committee (SSAC) to have Site Finder abolished for competitive reasons.